(Exact name of registrant as specified in its charter)

(Address of principal executive offices)

(Registrant's telephone number)

               As of July 31, 2003, 15,557,282 shares of the registrant's Common Stock, par value $.01 per share, were outstanding.

2

PART I.  FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

3

($ in thousands, except per share data)

(Unaudited)

The accompanying notes are an integral part of these statements.

4

($ in thousands)

(Unaudited)

The accompanying notes are an integral part of these statements.

5

(Unaudited)

        The accompanying unaudited consolidated financial statements of CARBO Ceramics Inc. have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2002 in cluded in the Company's Form 10-K Annual Report for the year ended December 31, 2002.

        The consolidated financial statements include the accounts of CARBO Ceramics Inc. and its wholly owned subsidiaries: CARBO Ceramics (UK) Limited, CARBO Ceramics (Mauritius) Inc. and Pinnacle Technologies, Inc. All significant intercompany transactions have been eliminated.

        On April 8, 2003, the Board of Directors declared a cash dividend of $0.09 per common share payable to shareholders of record on April 30, 2003. The dividend was paid on May 15, 2003.

        The following table sets forth the computation of basic and diluted earnings per share ($ in thousands, except per share data):

        During the six months ended June 30, 2003, employees exercised stock options to acquire 31,225 common shares at a weighted-average exercise price of $17.64 per share. The Company recognized a related income tax benefit of $229,000, of which $118,000 was credited directly to shareholders' equity, $23,000 was recorded as a reduction of goodwill for exercises of vested stock options assumed in the May 31, 2002 acquisition of Pinnacle Technologies and $88,000 was used to offset a previously recognized deferred income tax benefit.

        During the six months ended June 30, 2002, employees exercised stock options to acquire 121,150 common shares at a weighted-average exercise price of $17.97 per share. The Company recognized a related income tax benefit of $261,000, which was credited directly to shareholders' equity.

6

        Comprehensive income was as follows ($ in thousands):

        The Company accounts for its employee stock option plans under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. In general, no stock-based employee compensation cost is reflected in net income, as most options granted under the plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions of FASB Statement No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation ($ in thousands, except per share data):

        On May 31, 2002, the Company purchased 100 percent of the outstanding shares of Pinnacle Technologies, Inc. (Pinnacle). Results of operations for Pinnacle are included in the consolidated financial statements since that date. Pinnacle provides fracture diagnostic and mapping services, sells fracture simulation software and provides fracture design services to oil and gas companies worldwide. The acquisition was made for the purpose of expanding the Company's ability to provide production-enhancing solutions to exploration and production companies worldwide and providing a catalyst for accelerating the growth of ceramic proppant sales in the future. The acquisition was accounted for using the purchase method of accounting provided for under FASB Statement No. 141, "Business Combinations."

        The aggregate cost of the acquisition was approximately $26.7 million, including $12.4 million cash; 324,207 shares of common stock valued at $11.2 million; 158,300 stock options valued at $2.5 million granted in exchange for outstanding Pinnacle options; and $0.6 million direct costs of the acquisition. Goodwill was recorded as a result of the aggregate cost exceeding the fair value of the assets acquired of $9.0 million and liabilities assumed of $4.1 million. Goodwill is fully deductible for tax purposes. Under the terms of the acquisition agreement, the Company withheld $2.3 million of the aggregate purchase price in the form of $0.8 million cash and 43,621 common shares valued at $1.5 million. The final installment was paid on June 1, 2003 and recognized as additional goodwill.

7

        Following are pro forma amounts assuming the acquisition was made on January 1, 2002 ($ in thousands):

        The Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, management does not expect that the ultimate cost to resolve these matters will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows.

        In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest Entities," which clarifies the application of Accounting Research Bulletin 51 (ARB 51), "Consolidated Financial Statements," to certain entities (called variable interest entities) in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The disclosure requirements of this interpretation are effective for all financial statements issued after January 31, 2003. The consolidation requirements apply to all variable interest entities created after January 31, 2003. In addition, public companies must apply the consolidation requirements to variable interest entities that existed prior to February 1, 2003 and remain in existence as of the beginning of annual or interim periods beginni ng after June 15, 2003. FIN 46 is not expected to have a material impact on the Company's consolidated financial statements.

8

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

                                                                      RESULTS OF OPERATIONS

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which require the Company to make estimates and assumptions (see Note 1 to the consolidated financial statements included in the annual report on Form 10-K for the year ended December 31, 2002). The Company believes that some of its accounting policies involve a higher degree of judgment and complexity. Critical accounting policies for the Company include revenue recognition, estimating the recoverability of accounts receivable, inventory valuation, accounting for income taxes, accounting for long-lived assets, accounting for legal contingencies and accounting for business acquisitions. Critical accounting policies are discussed more fully in the annual report on Form 10-K for the year ended December 31, 2002 and there have been no changes in the Company's evaluation of its critical accounting policies.

Revenues. Revenues of $39.4 million for the quarter ended June 30, 2003 increased 33 percent from the same period a year earlier. The improvement in revenue was largely due to a 28 percent increase in sales volume with worldwide sales volume totaling 132 million pounds for the quarter. Driven by increased natural gas drilling activity, domestic sales volume climbed 14 percent versus last year's second quarter while the U.S. natural gas rig count increased by 28 percent compared to the same period a year ago. The Company believes that domestic sales volume lagged the growth in the natural gas rig count for the period due to an increase in drilling in shallower, less productive reservoirs that are not conducive to the use of the Company's ceramic proppants. Sales volume in Canada for the second quarter declined only two percent versus the same period in 2002 despite an extended spring break-up season in Canada this year caused by unusual weather conditions in the region. Sales outside of North America were the highest for any quarter in the Company's history and increased 114 percent versus the same period a year earlier. The Company saw significant increases in shipments to Russia and China due to an improvement in its competitive position following startup of it manufacturing facility in Luoyang, China earlier this year. Compared to sales volume in the first quarter of 2003, sales outside of North America increased 83 percent while sales in Canada declined by 69 percent and domestic sales were unchanged. International sales were led by shipments to Russia and China while sales in Canada were adversely impacted by the extended seasonal spring break-up period.

The second quarter 2003 average selling price of $0.272 per pound of ceramic proppant was two percent lower than the same period a year ago and unchanged from this year's first quarter. Revenues for the second quarter of 2003 included $3.5 million from Pinnacle Technologies, Inc., which the company acquired on May 31, 2002. Pinnacle Technologies' revenues for the portion of the second quarter of 2002 for which they were consolidated with the Company's revenues were $0.9 million.

Gross Profit. Gross profit for the second quarter of 2003 was $16.9 million, or 43 percent of sales, compared to $12.0 million, or 40 percent of sales, for the second quarter of 2002. Several factors combined to account for the improvement in gross profit margins, including excellent production results at the Company's manufacturing facility in China, increased sales of higher-margin ceramic proppants, reduced freight expense attributable to more efficient movement of finished goods and improved margins from Pinnacle Technologies. These factors more than offset the impact of higher natural gas costs in the Company's domestic production facilities.

Selling, General and Administrative Expenses (SG&A). Selling, general and administrative expenses totaled $5.9 million for the second quarter of 2003 and $4.3 million for the corresponding period of 2002. The increase was due to distribution activities that increase with higher sales volumes, increased marketing activities and the consolidation of expenses of Pinnacle Technologies for the entire second quarter in 2003 but only June of 2002. Operating expenses for 2003 also include a $717,000 write-off for manufacturing equipment disposed of in connection with the recent expansion of the Company's manufacturing facility in McIntyre, Georgia. This equipment was removed from the facility during the expansion project because it was determined to have no future value to the Company in its production operations.

9

Revenues. Revenues of $78.0 million for the six-month period ended June 30, 2003 surpassed revenues of $59.0 million for the same period in 2002 by 32 percent. The growth was driven primarily by a 25 percent increase in sales volume, with domestic sales volume up 15 percent and export sales volume up 50 percent. Canadian sales volume increased by 14 percent and sales outside of North America increased by 106 percent versus the first six months of 2002. Significant increases in international sales occurred in Russia and China. The average selling price per pound of ceramic proppant for the first half of 2003 was $0.272 versus $0.276 for the first half of 2002. Revenues for the first half of 2003 also included $6.3 million from Pinnacle Technologies, Inc. compared to $0.9 million for the same period in 2002. The Company acquired Pinnacle Technologies on May 31, 2002.

Gross Profit. Gross profit for the six months ended June 30, 2003 was $32.0 million, or 41 percent of revenues, compared to $23.6 million, or 40 percent of revenues, for the same period in 2002. Higher plant utilization, increased sales of higher-margin ceramic proppants and improved margins from Pinnacle Technologies contributed to the increased margins compared to the first half of 2002, but the benefits were partially offset by the impact of higher natural gas prices on domestic manufacturing costs. The price paid for natural gas delivered to the Company's domestic production facilities for the first half of 2003 was higher by an average of approximately $2.80/Mcf versus the first half of 2002.

Selling, General and Administrative Expenses (SG&A). Selling, general and administrative expenses totaled $11.8 million for the six months ended June 30, 2003 compared to $8.1 million for the six months ended June 30, 2002. The majority of the increase was due to the consolidation of expenses of Pinnacle Technologies for the entire first half of 2003 as opposed to only June in 2002. However, the Company also increased spending on distribution, marketing, business development and research activities. Other non-recurring operating expenses in the first half of 2003 include a $717,000 write-off for equipment disposed of during the expansion of the McIntyre manufacturing facility.

Cash and cash equivalents totaled $17.3 million as of June 30, 2003, a decrease of $7.1 million from December 31, 2002. The Company generated cash from operations of $9.0 million and realized $0.5 million proceeds from employee exercises of stock options. Uses of cash included capital spending of $12.9 million, payment of the final installment of $0.9 million for the purchase of Pinnacle Technologies, Inc. and cash dividends of $2.8 million. Major capital spending included $8.5 million on completion of the capacity expansion project at the McIntyre, Georgia manufacturing facility and $1.1 million on the addition of a third kiln at the New Iberia, Louisiana manufacturing facility.

On July 15, 2003, the Company's Board of Directors voted to increase the quarterly dividend paid to shareholders of the Company's common stock by 11 percent to $0.10 per share. The Company's current intention, subject to its financial condition, the amount of funds generated from operations and the level of capital expenditures, is to continue to pay quarterly dividends to shareholders of its common stock at the rate of $0.10 per share. The Company has total projected capital expenditures of approximately $10.0 million for the remainder of 2003, including the initial spending on a recently approved $6.6 million expansion expected to double the production capacity of the China manufacturing facility by the third quarter of 2004.

The Company maintains an unsecured line of credit of $10.0 million. As of June 30, 2003, there was no outstanding debt under the credit agreement. The Company anticipates that cash on hand, cash provided by operating activities and funds available under its line of credit will be sufficient to meet planned operating expenses, tax obligations and capital expenditures through 2003. The Company also believes that it could acquire additional debt financing, if needed. Based on these assumptions, we believe that the Company's fixed costs could be met even with a moderate decrease in demand for the Company's products.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This Form 10-Q, the Company's Form 10-K and Annual Report to Shareholders, any other Form 10-Q or any Form 8-K of the Company or any other written or oral statements made by or on behalf of the Company may include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that

10

could cause actual results to differ materially from such statements. This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, the Company's prospects, developments and business strategies for its operations, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties include, but are not limited to, changes in the demand for oil and natural gas, the development of alternative stimulation techniques and the development of alternative proppants for use in hydraulic fracturing. The words "believe", "expect", "anticipate", "project" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, each of which speaks only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's major market risk exposure is to foreign currency fluctuations that could impact its investment in China. When necessary, the Company may enter into forward foreign exchange contracts to hedge the impact of foreign currency fluctuations. There were no such foreign exchange contracts outstanding at June 30, 2003. The Company has a $10.0 million line of credit with its primary commercial bank. Under the terms of the revolving credit agreement, the Company may elect to pay interest at either a fluctuating base rate established by the bank from time to time or at a rate based on the rate established in the London inter-bank market. The Company does not believe that it has any material exposure to market risk associated with interest rates.

ITEM 4.    CONTROLS AND PROCEDURES

(a)          Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the quarter ended June 30, 2003, management carried out an evaluation, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the end of the quarter for which this report is made, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

(b)          Changes in Internal Control over Financial Reporting

There were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2003 that materially affected, or are reasonably likely to materially affect, those controls.

11

PART II.  OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5.    OTHER INFORMATION

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

12

13

SIGNATURES

               Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

                                                                                                         CARBO CERAMICS INC.

                                                                                                          /s/ C. MARK PEARSON                        

                                                                                                         C. Mark Pearson

                                                                                                         President and Chief Executive Officer

                                                                                                          /s/ PAUL G. VITEK                                 

                                                                                                         Paul G. Vitek

                                                                                                         Sr. Vice President, Finance and

                                                                                                         Chief Financial Officer

                                                                            Date: July 31, 2003

14

EXHIBIT INDEX

EXHIBIT                                                             DESCRIPTION

31.1               Rule 13a-14(a)/15d-14(a) certification by C. Mark Pearson.

31.2               Rule 13a-14(a)/15d-14(a) certification by Paul G. Vitek.

32.1               Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

                      Sarbanes-Oxley Act of 2002.

15